Now Morgan Stanley, Credit Suisse and UBS may make thousands of redundancies. But look on the bright side
Things change. When Morgan Stanley made a presentation a few weeks ago, it some mention of cost cutting but no mention of redundancies and reiterated its intention of increasing its market share by pushing into fixed income electronic trading.
Now, Fox Business says Morgan Stanley is "running layoff scenarios into several thousand folks," including traders and investment bankers.
'Running layoff scenarios,' is not the same as making layoffs and a statement from the bank that, "We are constantly evaluating the market conditions to ensure we are right sized," does not amount to an admission that thousands of redundancies are on the way. In fact, Morgan Stanley denies that it has any current plans for a major workforce reduction.
You can see why such a thing might make sense though. Revenues at Morgan Stanley were down nearly 35% in the first quarter. Fox News suggests there's disquiet in the ranks at the thought of what underperforming business areas might do to this year's bonus pool.
The big bright side
Morgan Stanley isn't alone in contemplating/making investment banking redundancies.
Reuters reports today that Credit Suisse and UBS are also contemplating 'thousands' of redundancies (5,000 at UBS, 1,000 at Credit Suisse).
And already hanging out in the same seagoing vessel are BAML, RBS, HSBC, BarCap, Nomura and Goldman Sachs (although they are - so far - making hundreds, not thousands of cuts).
The reality, say headhunters, is that all banks are making redundancies. Some are just doing so more discreetly than others.
If you're unfortunate enough to lose your job this year, it will be serious. As we suggested last month, banks' front office headcount requirements may be in secular decline. Getting back into the market once you're out could be hard. "None of my clients will look at someone who's out of the market," says one fixed income headhunter.
However, there is one massive benefit to losing your job: your stock.
When you're made redundant, you get your stock; now. You do not have to wait for years for it to vest. Given the likelihood that bank stocks will suffer further during the sovereign debt crisis, redundancy in mid 2011 could yet prove a great blessing in disguise.
